Question

Which of the following is NOT included in the expenditure approach to calculatingâ GDP?

A. consumption expenditure
B. investment
C. wages
D. net exports of goods and services
E. government expenditures on goods and services

Answer 1

Option (C) is correct.

Step-by-step explanation:

The expenditure method for calculating GDP of a nation includes consumption expenditure, investment expenditure, government final consumption expenditure and net exports of a nation.

The expenditure method of determining GDP is different from income and value added method of calculating GDP.

In the long run, the equation of expenditure for GDP is equivalent to the aggregate demand in an economy.

Hence, wages are not included while calculating GDP from expenditure approach.